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JetBlue Airways:Regaining Altitude after the Valentines Day Massacre of 2007

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Abstract

Valentines Day 2007 changed the course of history for JetBlue Airways. Theupstart low-fare airline which had enjoyed unprecedented acclaim from customersand industry observers suddenly found itself in the midst of its first major operational

catastrophe. A winter storm that enveloped the New York metropolitan region andJetBlues hub at John F. Kennedy International Airport left hundreds of the companyspassengers stranded in the terminal, and worse, in planes on the tarmac. The flightdisruptions at JFK plunged JetBlues entire operation into chaos, forcing the carrier tocancel more than one thousand flights over a six day period. The cancellations cost theairline an estimated $20 million in revenue and $24 million in flight vouchers tocustomers who were impacted by the disruptions. JetBlue founder and CEO DavidNeeleman and his executive team knew they had to find a way to restore the companysonce sterling reputation. This case study describes the corporate communicationdilemma faced by JetBlue Airways in the wake of its 2007 winter storm-related crisis

known as the Valentines Day Massacre.

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Table of Contents

Introduction .. 4

JetBlue Takes Off .. 4

The Perfect Storm . 6

On Thin Ice 7

JetBlack and Blue .. 8

Misery Loves Coverage ... 9

Congress Comes Calling . 10

Dilemma 11

Discussion Questions ... 14

Appendices 15

References .. 19

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Introduction

For JetBlue Airways, which prided itself on bringing the humanity back to airtravel,1Valentines Day 2007 served as a stark reminder that every honeymooneventually comes to an end. The New York-based airline began the year on a roll;

growth both in terms of destinations and fleet size was far outpacing even the mostambitious projections. JetBlue enjoyed a cult-like following among its loyal customers,thanks in large part to uncommonly attentive service, generous legroom, free satellitetelevision feeds in every leather seat, and of course, the companys signature blue Terrapotato chips. In fact, the airline ranked highest in customer satisfaction among low-costairlines in 2006 and among all major airlines in the United States in 2005.2

Yet as a winter noreaster barreled toward the New York metropolitan region onFebruary 14, 2007, JetBlue leaders were blissfully unaware that the next seven dayswould be by far the most trying in the companys eight year history. By February 19, the

company had cancelled more than one thousand flights and incurred tens of millions ofdollars in losses. Worse, JetBlues sterling reputation was now tarnished because of badluck, flawed decision-making, and multiple systemic failures. As pressure mounted,JetBlue founder and CEO David Neeleman encouraged his executive team to search forbold and inventive solutions. If that meant parting with convention, then so be it,Neeleman told them. One thing was clear: JetBlue Airways needed a plan to win backcustomers, reassure employees and investors, and restore its public image.

JetBlue Takes Off

The launch of JetBlue Airways in 1999 was never supposed to work. After all, ofthe 58 start-up jet airlines that had commenced operations since the U.S. governmentderegulated the industry in 1978, only two survived.3The prospect of making money inthe airline industry is so exceedingly difficult that billionaire investor Warren Buffetonce famously remarked that capitalism would have been better served had someoneshot down the Wright brothers prototype airplane at Kitty Hawk, North Carolina, acentury earlier.4

Airlines today face high fixed costs because scheduled flights have to take offwhether they are full or empty.5Carriers also incur staggering expenses that are subject

to market volatility, such as jet fuel, and are particularly sensitive to the ebbs and flowsof economic cycles.6It is a business whose margins are so razor thin that a couple ofpassengers on each plane can spell the difference between profit and loss and where aone-cent rise in the price of jet fuel can cost the industry an added $180 million a year,wrote industry expert Barbara Peterson.7

The pitfalls of the airline business were not always so apparent. Commercialaviation in the U.S. entered its heyday following World War II, a time when many

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airlines enjoyed lucrative lease contracts from the military, and the demand forpassenger and cargo transport soared. Industry behemoths like Eastern Air Lines, TransWorld Airlines, United Airlines, American Airlines, Braniff International Airways,Northwest Airlines, and Delta Air Lines reaped enormous profits and ruled the skiesuntil Congress and President Jimmy Carter passed the Airline Deregulation Act of

1978.8 The primary purpose of the act was to eliminate government control overcommercial aviation and encourage market forces to shape the industrys development.

While the Airline Deregulation Act ensured easier market entry for new carriers,success did not automatically follow for these start-ups. The cutthroat competitivetactics employed by the legacy airlines in the 1980s and 1990s caused most newcompanies to fail. Still, competition persisted and airfares dropped significantly duringthe 1990s and into the 21st century, leading to the rise of low-cost carriers such asAirTran Airways, Southwest Airlines, and JetBlue Airways.

JetBlue was the brainchild of David Neeleman, an industry visionary whopromised to bring humanity back to air travel.9Neeleman, who was born in Brazilbut grew up in Utah as part of a large Mormon family, was no stranger to start-upairlines.10He helped to build Morris Air, a Utah-based airline that Southwest acquiredin 1993 for $129 million.11

Neeleman leveraged his industry experience and connections to create acompany that would boast a fleet of brand new airplanes, low fares, and a host ofcustomer-friendly embellishments that legacy carriers and other start-ups would behard-pressed to match. Neeleman envisioned treating JetBlues customers never

referred to as passengers to comfy and wide leather seats, paperless ticketing, andexceptional service by flight crew members. Every seat would come equipped with atelevision that featured dozens of free channels provided by satellite signal. Finally, tokeep costs down, JetBlue would offer a virtually unlimited supply of appealing in-flightsnacks instead of soggy meals that no one really wanted.12

Backed by an impressive capital reserve, Neelemans plan worked far soonerthan even the most optimistic industry observers predicted. With its new airplanes andflights to and from previously underserved markets, JetBlue quickly shot to the top ofJ.D. Power and Associates customer satisfaction surveys.13Based at New Yorks John F.Kennedy International Airport, the start-up soon expanded operations to Los Angeles(via Long Beach Airport), southern Florida, and a host of smaller markets, such asBuffalo, New York.

JetBlues launch was particularly well-timed. Despite frequent pricing skirmishesresulting from increased competition between the low-cost and legacy airlines, thedomestic commercial aviation industry as a whole started 2001 with 24 consecutivequarters of profitability.14Passenger volume had risen at an average rate of 3.6% per

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year between 1990 and the end of 2000, and net profits for the industry totaled $7.9billion in 2000.15Despite these trends, many legacy carriers were struggling to maintainprofitability due to the competition posed by low-cost carriers. Then the unthinkablehappened.

The hijacking and downing of four U.S. jetliners in New York City, WashingtonD.C., and rural Pennsylvania by terrorists on September 11, 2001 crippled an alreadyailing airline industry. Consumer confidence in the safety and security of air travelplummeted, sending booking rates down by 70% when flights resumed after 9/11.16The industry, which generated 11 million jobs and constituted nine percent of the U.S.gross domestic product, saw more than 80,000 jobs eliminated during the two monthsimmediately following the attacks.17Only three airlines managed to turn a profit in2001: low-cost carriers Southwest, AirTran, and JetBlue.18

Due in large part to its size and flexibility, JetBlue continued to impress in the

years that followed. In 2002, Advertising Age crowned JetBlue the Marketer of theYear19and claimed the companys branding efforts gave it a singular identity in acrowded and often confusing marketplace.20JetBlue flights were among the most on-time in the industry in 2003, the same year the airline filled most of its available seats onplanes two feats that rarely go hand-in-hand.21By mid-2004, the company had turneda profit for more than 16 consecutive quarters.22

Although JetBlue reported a net loss of $1 million in 2006 primarily due tosoaring jet fuel expenses, the companys operating revenue totaled $2.36 billion, whichconstituted growth of nearly 39 percent over fiscal year 2005.23By 2007, the airlines

growing fleet of Airbus and Embraer jets served 52 destinations with more than 575daily flights.24Even though an increasing number of critics forecasted growing pains forJetBlue after its meteoric rise, the love affair between the upstart airline and its faithfulcustomers appeared to be as strong as ever.

The Perfect Storm

Valentines Day 2007 got off to an inauspicious start in the New Yorkmetropolitan area. Bleak, gray skies blanketed the region and weather forecasterswarned of a wintry mix of precipitation. JetBlue officials at JFK International Airportgambled that temperatures would warm up enough to change the snowfall and icyslush into rain. Six JetBlue planes four bound for domestic destinations, one headedfor Aruba, and another for Cancun, Mexico were loaded early in the day withpassengers, luggage, and cargo.25The planes pushed back from their respective gatesand waited for word of a break in the storm. Meanwhile, several inbound flightslanded, taxied, and filled most of the airlines dedicated gates.

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With no end to the freezing rain in sight, JetBlue and airport officials hatched aplan to allow planes stranded on the tarmac to ferry back and forth to the fewremaining open gates for offloading. This strategy failed, however, when the runwayequipment used to tow the planes froze to the ground. Said a JetBlue spokesman: Wehad planes on the runways, planes arriving, and planes at all our gates... We ended up

with gridlock.26

Meanwhile, almost all of the other airlines operating at JFK had called off theirflights earlier in the day. Scores of JetBlue passengers in the terminal waited in vain toboard flights that would inevitably be cancelled. We thought there would be thesewindows of opportunities to get planes off the ground, and we were relying on thoseweather forecasts, said Sebastian White, a corporate communications manager atJetBlue.27Freezing rain continued to fall on New York, entombing hundreds ofpassengers inside JetBlue planes that were stranded on the runways at JFK. The worst,however, was yet to come.

On Thin Ice

Deteriorating weather conditions at JFK and flaring tempers both inside JetBluesterminal and aboard its planes only exacerbated the companys crisis. Nine of theairlines jets sat idle on the tarmac for more than six hours before passengers weresuccessfully offloaded and taken to the terminal.28Passengers aboard one JetBlue flightthat landed at the airport were trapped inside the plane for a full nine hours.29

Tensions inside the planes ran high during the seemingly interminable ground

delays. The airlines pilots tried to provide frequent updates and apologies, while crewmembers in the cabins did their best to appease restless customers with snacks andbeverages. It was not until 3 p.m. on Valentines Day that JetBlue officials at JFK finallycalled the Port Authority of New York and New Jersey to request buses that the airlinecould use to shuttle passengers from the stranded planes back to the terminal.30

As the waiting continued, some passengers became reluctant to use the on-boardrestrooms. I dont know what anyone else did, but I just held it, said a man whoclaimed the lavatories aboard his JetBlue flight stopped working.31Two puppies on themans flight had no compunction about using the facilities; they were led to the rear ofthe cabin so they could relieve themselves on newspapers, he said.32

The crisis took a particularly troubling turn at Newark Liberty InternationalAirport on February 15. Several passengers became unruly upon learning of additionalflight cancellations, prompting JetBlue ticketing personnel to call in the police forprotection.33

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JetBlue customers found little solace in calling the airlines reservations hotline orvisiting JetBlue.com on the World Wide Web. Even by Friday, February 16, many callerswho dialed the companys telephone number were still greeted by a recorded voice thatsaid, We are experiencing extremely high call volume We are unable to take yourcall.34Additionally, JetBlues Web site listed flights as on schedule for departure when,

in fact, the carrier had already cancelled many of those flights.35

Widespread instances of lost baggage further infuriated JetBlues customerswhose travel plans were disrupted by the Valentines Day storm. Said one passenger atJFK: Were staring at thousands of bags. Were in a sea of luggage, and [our bags]cannot be found.36Another customer described the companys efforts to sort throughthe mounds of luggage as organized chaos.37

JetBlack and Blue

JetBlue soon found that many of its planes and flight crews scattered across therest of the country were now out of place due to the disruptions at its hub in New York.As a result, the carrier was forced to cancel more than 250 of its 505 daily flightsscheduled for Valentines Day.38JetBlue called off 217 of its 562 scheduled departureson February 15, as well.39

We had a problem matching aircraft with flight crews, said Jenny Dervin,JetBlues director of corporate communications.40Company leaders quickly settledupon a strategy designed to reset the airlines operations. Sometime in the afternoon[of February 16], it just fell apart, said Dervin.41The folks running the operation

[were] just exhausted. We said, Lets stop the madness. The plan to reset operations,however, came at a steep price: JetBlue was forced to cancel approximately 1,200 flightsbetween February 14 and February 19.42

David Neeleman cited multiple operational failures that compounded the crisis.Among the primary culprits: inadequate communication protocols to direct thecompanys 11,000 pilots and flight attendants on where to go and when; anoverwhelmed reservation system; and the lack of cross-trained employees who couldwork outside their primary area of expertise during an emergency.43

We had so many people in the company who wanted to help who werenttrained to help, Neeleman said.44We had an emergency control center full of peoplewho didnt know what to do. I had flight attendants sitting in hotel rooms for threedays who couldnt get a hold of us. I had pilots e-mailing me saying, Im available,what do I do?

As the crisis deepened, JetBlue leaders began to calculate the financial hit thecompany would take because of lost revenue from cancelled flights, as well as refunds

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and vouchers issued to stranded customers. Its going to certainly impact us, and itsgoing to be many millions of dollars that were going to lose from this, said Neelemanseveral days after the winter storm.45

The cancellations during the five-day period cost the airline an estimated $20

million in revenue and $24 million in flight vouchers to customers who were impactedby the disruptions.46Within days of the storm, JetBlue lowered its operating marginforecast for the fiscal quarter and the year; investors immediately responded by sellingoff their shares of JetBlue stock.47As the losses mounted, Neeleman became obsessedwith finding a way to restore JetBlues sterling reputation and win back disillusionedcustomers.

Misery Loves Coverage

Call it the perfect storm, the imperfect storm, the Valentines Day Massacre,

said one JetBlue vice president.48Regardless of the label that the public affixed to thecrisis, JetBlue officials knew the media interest in the story would be sky high. Thecompanys corporate communications department fielded roughly 5,000 telephoneinquires from the media between February 14 and February 19.49

JetBlues reputation as a successful and offbeat upstart airline only seemed toinvite sensational newspaper headlines during the crisis. The New York Postpublishedan article under the banner: Air Refugees in New JFKaos; Hordes Camp OvernightBefore JetBlue Says: Tough Luck, No Flights.50A New York Times story entitledLong Delays Hurt Image of JetBlue similarly predicted reputational damage for the

carrier as a result of the crisis.51

The headline of a Newsday article asked the questionvirtually every industry observer wanted to know: Can JetBlue Recover?52

Television and print news reports were equally harsh. For their part, angryJetBlue customers provided plenty of material. They are right on the edge of human-rights violations, said one passenger whose travel plans to attend his mothers funeralin Baltimore were temporarily derailed.53They have no contingency plan at all. Whenthey say no frills, they mean it, he said. Another JetBlue customer who spent nearlynine hours aboard the grounded Valentines Day flight bound for Cancun remarked: Itwas like whats the name of that prison in Vietnam where they held [Senator John]McCain? The Hanoi Hilton.54

With all eyes on the embattled company, JetBlue leaders knew they had tochoose their public relations battles carefully. It was a horrible situation, said ToddBurke, vice president of corporate communications.55However, we never hadoverflowing toilets on the planes. We never ran out of food and water like people said,but that was the customers perception.

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Although most of the media stories that began trickling out on February 14 andFebruary 15 recounted tales of passengers woes, several reports of creativity on thepart of JetBlue employees emerged. Flight attendants aboard planes that were strandedon the tarmac at JFK on Valentines Day kept children busy by allowing them to pushbeverage carts and serve snacks.56The crew members also invited passengers to

recharge their mobile phones through electrical outlets on the planes.57

When the supply of snacks ran low aboard a JetBlue flight that was destined forFlorida but marooned on the tarmac at JFK, pilots arranged for pizzas to be delivered tothe plane.58The gesture, along with the satellite television access in every seatback,went a long way toward soothing frazzled nerves. The TVs were a saving grace, saidone passenger.59

Perhaps the most remarkable story of ingenuity involved two JetBlue pilots whoon February 16 paid a taxi driver $360 to shuttle them from New York City to the

upstate town of Newburgh, where one of the companys jets sat idle.60The pilots flewthe plane to JFK, loaded it with passengers and luggage, and then continued on toSarasota, Florida. The New York Daily News reported that the passengers came off theplane cursing the airline but marveling at the flight crew.61One passenger on the flightto Sarasota remarked, Ive never experienced a pilot and a co-pilot getting in a taxi caband finding a plane.62

Congress Comes Calling

Just days after JetBlues operational meltdown at JFK, members of Congress

began calling for legislation designed to prevent air travelers from being held captiveinside grounded airplanes for excessive amounts of time. Many suggested that theimplementation of an industry-wide passenger bill of rights would be necessary to spurmajor airlines to action. These legislators argued that a bill of rights would entitlepassengers to receive standardized compensation from carriers that fail to meet certainservice levels, such as a flight that remains on the runway for hours after pushing backfor departure.

David Neeleman bristled at the thought of government intervention. We willchange our operational strategy based on this [crisis], JetBlues CEO said.63We wouldprefer to be in control of how we compensate customers we have inconvenienced.

Following Neelemans lead, JetBlue tried to beat the zealous legislators to thepunch. Late on February 14, the company issued a statement announcing that anycustomers who had been stranded aboard one of its planes for longer than three hourswould receive a full refund and a free roundtrip flight.64Many industry expertssuggested that this measure would do little to quell the groundswell of public support

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for standardized service level benchmarks on domestic flights. Surprisingly, JetBlueschief executive agreed.

In order for JetBlue to regain its former prestige, Neeleman knew he would haveto propose that the airline do something novel, something impressive, something no

competitor had ever done before. I can flap my lips all I want, Neeleman said.65Talkis cheap. Watch us.

Dilemma

The winter storm that gripped the northeast United States on Valentines Day2007 set off a chain reaction of interdependent business problems and corporatecommunication quandaries for JetBlue Airways. Company leaders had already decidedto reset flight operations, prompting the cancellation of hundreds of flights betweenFebruary 14 and February 19. Passengers would have to be rebooked, lost pieces of

luggage would have to be returned to their owners, and refunds would have to beissued to customers who opted to fly another airline or make use of alternate means oftransportation. In such matters, David Neeleman and his leadership team had littlechoice.

Making amends with JetBlues customer base was another issue entirely.Numerous public apologies and promises of corrective action had already been madeby company representatives in the five days that followed Valentines Day. Neelemaneven starred in a video mea culpa posted to the companys Web site and YouTube.66This was not acceptable, said JetBlue spokesman Bryan Baldwin in another such

statement.67

We pride ourselves on being a customer service company and we failed tomeet the needs of our customers.... We are going to go back and analyze whathappened and make sure it never happens again.

By February 19, JetBlue leaders recognized that the company was at a crossroads.One option was to place a greater emphasis on the winter storms role in the operationalproblems at JFK and across the country. The strategy of redirecting blame had certainlyworked for other airlines in the past; after all, the public generally accepted thatweather was a frequent cause of air travel disruptions.

The leadership team was mindful that other major carriers had experiencedbacklashes following weather-related crises. Northwest Airlines, for example, wasvilified in 1999 when one of its flights from the Caribbean arrived in Detroit 22 hourslate and then sat on the tarmac for 8 additional hours.68Northwest instituted andpublicized a formal recovery plan that included the purchase of mobile staircases at adozen airports so that passengers could deplane even if all the gates were occupied.69

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JetBlue executives knew that such preventative measures could prove to be avery worthwhile investment and a good discussion point when addressing key publics.They feared, however, that these actions would not go far enough in reconnecting withcustomers like Patricia Fabricant, who told a New York newspaper, This has been oneof the worst experiences of our lives.70

The corporate communications team at JetBlues Queens-based headquartersdebated whether to put David Neeleman on the television news and talk show circuit.On one hand, JetBlues charismatic and affable CEO could explain to the public whatexactly had gone wrong. Neeleman could also tell a broad audience what the companywas doing to prevent a repeat occurrence of the crisis. On the other hand, his presenceon major network news programs might draw additional unwanted attention to anepisode nearly every JetBlue employee wanted desperately to forget.

The biggest decision facing JetBlues leadership team concerned a proposal set

forth by Neeleman himself just days earlier. He suggested a gambit that was likely togarner much-needed positive attention for the beleaguered airline, but would alsocommit the company indefinitely to millions of dollars in potential losses. Neelemansidea was a JetBlue Airways Customer Bill of Rights that would specify in no uncertainterms how passengers would be compensated if the company failed to meet certainperformance standards. For example, customers would receive vouchers good towardfuture travel if their flight sat on the tarmac after landing for more than a certainnumber of minutes. The value of these credits would escalate the longer the passengerswere forced to wait on board the plane. In essence, JetBlue would be putting its moneyin place of its mouth.

The idea was met with understandable skepticism by the members ofNeelemans executive team. The ongoing costs associated with such a groundbreakingprogram would be unpredictable at best and staggering at worst. Furthermore, afavorable reaction to the initiative by shareholders and Wall Street was far from a given.As the weekend progressed, Neeleman faced countless questions and staunchobjections in some cases from the heads of JetBlues legal, finance, flight operations,government affairs, and marketing teams, to name a few.71No other airline has evercommitted to something like this, they argued.

Neeleman who was known for personally answering every customer letter ore-mail he received viewed the Customer Bill of Rights as absolutely vital to restoringJetBlues image. He contended that the bill of rights would reaffirm the publicsperception that JetBlue viewed air travelers as human beings, not cattle to be shippedfrom Point A to Point B. This is going to be a different company because of this, Mr.Neeleman said. Its going to be expensive. But whats more important is to win backpeoples confidence.72

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A proposed JetBlue Airways Customer Bill of Rights was sure to catch theattention of not only employees, customers, and shareholders, but rival airlines as well.The major carriers had historically shied away from putting performance guarantees ofthis nature in writing.73Even if JetBlue pushed forward with this innovative but costlybill of rights program, Neeleman felt certain that the established industry heavyweights

would be unlikely to follow suit.

In numerous interviews throughout the weekend, Neeleman promised that hewould reveal JetBlues redemption plan to the world by Monday, February 19. If acustomer bill of rights was going to be part of that plan, the CEO still had to convincemany influential people inside the company. As the weekend drew to a close,Neeleman and his leadership team needed to make some tough decisions ones thatwould undoubtedly change the course of history for JetBlue Airways.

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Discussion Questions

1. What image restoration strategies should JetBlue Airways employ to rebuild itsreputation as a customer-centric company?

2. If you were in charge of JetBlues external communication effort, how would you tryto make amends with customers who were delayed aboard planes or in terminals forhours?

3. How could JetBlue have better communicated with its internal stakeholders acrossthe country on Valentines Day and during the days that followed?

4. When addressing the companys stakeholders, how much blame for the crisis wouldyou place on the inclement weather on Valentines Day?

5. What is the best way to publicly explain the hundreds of additional flightcancellations that were necessary because of JetBlues decision to reset itsoperations?

6. Should the corporate communications team at JetBlue arrange for CEO DavidNeeleman to appear on the national television news and talk show circuit followingthe crisis? What are the potential benefits and risks to the companys reputation?

7. What are the financial and reputational risks of publicly committing to an initiativelike the JetBlue Airways Customer Bill of Rights?

8. What concerns might JetBlues shareholders as well as members of its legal andfinance departments have about a proposed JetBlue Airways Customer Bill ofRights?

9. Could JetBlue ever retract its Customer Bill of Rights once it is made public?10.If implemented, how would you market the JetBlue Airways Customer Bill of Rights

to external and internal stakeholders?

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Appendices

Appendix A JetBlue Airways News Release (February 14, 2007)

JetBlue Statement Regarding Operational Impact Today

NEW YORK, Feb. 14, 2007 (PRIME NEWSWIRE) -- JetBlue Airways issues the followingstatement regarding operational disruptions caused by a winter weather system:

JetBlue apologizes to customers who were impacted by the ice storm at our home baseof operations in New York, specifically at John F. Kennedy International Airport. Of the505 daily flights operated by JetBlue, more than 250 flights were cancelled, andapproximately 10 flights were significantly delayed at JFK with customers on board.

These flights were a combination of scheduled departures from JFK that were not ableto take off due to the ever-changing weather conditions, and arrivals that we wereunable to move to a gate within a reasonable amount of time, due to all gates beingoccupied.

This resulted in unacceptable delays for our customers. JetBlue sincerely apologizes toall customers impacted by today's weather and will be issuing a full refund and a freeroundtrip flight to customers delayed onboard any aircraft in excess of three hours.JetBlue's customer commitment team will be contacting these customers as soon aspossible.

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Appendix B JetBlue Airways News Release (February 17, 2007)

JetBlue Airways Pre-Cancels 23 Percent of its Scheduled Flights for Feb. 17 and Feb. 18,2007

NEW YORK, Feb. 17, 2007 (PRIME NEWSWIRE) -- JetBlue Airways today announcesthat it has pre-cancelled 23 percent of its Saturday, Feb. 17 and Sunday, Feb. 18 schedulein order to reset the operation by positioning all aircraft and allowing flight crews toreset their operating clocks. Further cancellations may occur throughout the operatingdays.

The airline has canceled all flights to and from the following cities for Saturday, Feb. 17and Sunday Feb. 18:

Austin, TX Nashville, TNBermuda Pittsburgh, PACharlotte, NC Portland, MEColumbus, OH Raleigh/Durham, NCHouston, TX Richmond, VAJacksonville, FL

Flights to other JetBlue destinations may be impacted as well. Customers are asked tocheck the status of their flight online at www.jetblue.com. Customers whose flights

have been cancelled will be granted full refunds or JetBlue credit, or may choose torebook their travel through May 22, 2007.

Refunds and credits may be obtained through www.jetblue.com. Customers mayrebook their travel by calling 800-JETBLUE (800-325-2583). Call volume is high;customers may have difficulty getting through to reservations. Customers may rebookvia 800-JETBLUE anytime through May 22.

JetBlue attempted to recover from the Feb. 14 ice storm by selectively canceling flightson Feb. 15 and Feb. 16 in order to help reset the airline's operation. The benefits of this

action were mitigated by further operational constraints at JFK, including a one runwayoperation on Feb. 15, which resulted in long delays that flowed into Feb. 16.

JetBlue is taking this aggressive, unprecedented action to end rolling delays andcancellations, and to operate a new schedule reliably.

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Appendix C YouTube Video Featuring JetBlue CEO David Neeleman (February 18, 2007)

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Appendix D JetBlue Airways Stock Value (January 1, 2007 February 20, 2007)

JetBlue Stock Value January 1, 2007 through February 20, 2007(Yahoo! Finance)

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References

1Peterson, B. (2004). Bluestreak: Inside JetBlue, the upstart that rocked an industry. NewYork: Portfolio.

2JetBlue Airways ranked highest in J.D. Power and Associates North America airline customersatisfaction study.(2007, June 19). Retrieved November 2, 2007, fromhttp://investor.jetblue.com/phoenix.zhtml?c=131045&p=irol-newsArticle&ID=1017111&highlight=

3Peterson, B. (2004). Bluestreak: Inside JetBlue, the upstart that rocked an industry . NewYork: Portfolio.

4Ibid.

5Ibid.

6Ibid.7Ibid.

8After 20 years, experts say airline deregulation has cut fares, allowed millions more to fly.(1998, October 22). Retrieved from CNN.com on November 7, 2006:http://www.cnn.com/TRAVEL/NEWS/9810/22/airline.deregulation/index.html


10Ibid.

11

Bailey, J. (2007, May 11). JetBlue's leader is giving up chief executive title. The NewYork Times, p. C2.

12Cohn, M. (2007, February 20). JetBlue woes may spur wider changes. The BaltimoreSun, p. A1.

13Bailey, J. (2007, February 17). Long delays hurt image of JetBlue. The New York Times,p. C1.

14Blunk, S.; Clark, D.; McGibany, J. (2006). Evaluating the long-run impacts of the 9/11terrorist attacks on U.S. domestic airline travel.Applied Economics, 38, 363-370, 363.

15Ibid.

16Kim, H. & Gu, Z. (2004). Impact of the 9/11 terrorist attacks on the return and risk ofairline stocks. Tourism and Hospitality Research, 5(2), 150-163, 151.

17Ibid.

18Flouris, T. & Walker, T. (2005). The financial performance of low-cost and full-serviceairlines in times of crisis. Canadian Journal of Administrative Sciences, 22(1), 3-20.

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19Thomaselli, R. (2007, February 19). Management's misjudgment gives JetBlue a blackeye.Advertising Age,78(8). Retrieved November 10, 2007, from Business Source Premierdatabase.

20Tsui, B. (2000, September 11). JetBlue soars in first months.Advertising Age, 71(38).Retrieved November 10, 2007, from Business Source Premier database.


22Ibid.

23JetBlue announces fourth quarter and full year 2006 results.(2007, January 30). RetrievedNovember 2, 2007, from http://investor.jetblue.com/phoenix.zhtml?c=131045&p=irol-newsArticle_Print&ID=955585&highlight=

24JetBlue Airways names Dave Barger president and chief executive officer.(2007, May 10).

Retrieved November 2, 2007, fromhttp://investor.jetblue.com/phoenix.zhtml?c=131045&p=irol-newsArticle&ID=998672&highlight=

25Strickler, A. (2007, February 15). Stormy weather: Waiting til they're blue; JetBluepassengers stranded on planes for hours amid icy snarl at JFK gates. New York Newsday,p. A5.

26Ibid.

27White, S. (personal interview, November 29, 2007).

28Bailey, J. (2007, February 17). Long delays hurt image of JetBlue. The New York Times,

p. C1.


30Chung, J.; & Strickler, A. (2007, February 18). A labyrinth of luggage as travelerssearch through mounds of baggage; JetBlue cancels hundreds of weekend flights.Newsday,p. A3.

31Strickler, A. (2007, February 15). Stormy weather: Waiting til they're blue; JetBluepassengers stranded on planes for hours amid icy snarl at JFK gates. New York Newsday,

p. A5.

32Ibid.

33Lee, J. (2007, February 16). JetBlue flight snarls continue. The New York Times, p. 7.

34Daly, M. (2007, February 18). How two pilots put silver lining in JetBlue clouds. NewYork Daily News, p. 12.

35Ibid.

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37Ibid.

38JetBlue statement regarding operational impact today.(2007, February 14). RetrievedNovember 2, 2007, from http://investor.jetblue.com/phoenix.zhtml?c=131045&p=irol-newsArticle&ID=963450&highlight=

39Bailey, J. (2007, February 17). Long delays hurt image of JetBlue. The New York Times,p. C1.

40Lee, J. (2007, February 16). JetBlue flight snarls continue. The New York Times,p. 7.

41Bailey, J. (2007, February 18). JetBlue cancels more flights, leading to passengerdiscord. The New York Times,p. A31.

42Elsasser, J. (2007). True blue: After a customer relations crisis, lessons learned atJetBlue. Public Relations Strategist, 13(3), 14-19.

43Bailey, J. (2007, February 19). Chief 'mortified' by JetBlue crisis. The New York Times, p.A11.

44Ibid.

45Thomaselli, R. (2007, February 19). Management's misjudgement gives JetBlue a blackeye.Advertising Age, 78(8). Retrieved November 10, 2007, from Business Source Premierdatabase.

46

Bailey, J. (2007, May 11). JetBlue's leader is giving up chief executive title. The NewYork Times,p. C2.

47Korkki, P. (2007, February 27). Investors mostly glum in a short trading week. TheNew York Times, p. C10.

48Capps, B. (2007, April 30). Management's misjudgement gives JetBlue a black eye.Advertising Age 78(18). Retrieved November 10, 2007, from Business Source Premierdatabase.


50Doyle, J.; Kadison, D.; & Olshan, J. (2007, February 16). Air refugees in new JFKaos;Hordes camp overnight before JetBlue says 'tough luck,' no flights. The New York Post,p.10.

51Bailey, J. (2007, February 17). Long delays hurt image of JetBlue. The New YorkTimes, p. C1.

52Luhby, T. (2007, February 19). Can JetBlue recover? Newsday,p. A7.

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53Doyle, J.; Kadison, D.; & Olshan, J. (2007, February 16). Air refugees in new JFKaos;Hordes camp overnight before JetBlue says 'tough luck,' no flights. The New York Post,p.10.

54Ibid.



57Ibid.

58Doyle, J.; Kadison, D.; & Olshan, J. (2007, February 16). Air refugees in new JFKaos;Hordes camp overnight before JetBlue says 'tough luck,' no flights. The New York Post, p.

10.59Nestel, M. (2007, February 16). Winter mess storm of criticism; JetBlue on thin ice withair travelers. Newsday, p. A3.

60Daly, M. (2007, February 18). How two pilots put silver lining in JetBlue clouds. NewYork Daily News, p. 12.

61Ibid.

62Ibid.

63Bailey, J. (2007, February 17). Long delays hurt image of JetBlue. The New York Times,

p. C1.64JetBlue statement regarding operational impact today. (2007, February 14). RetrievedNovember 2, 2007, from http://investor.jetblue.com/phoenix.zhtml?c=131045&p=irol-newsArticle&ID=963450&highlight=

65Bailey, J. (2007, February 19). Chief 'mortified' by JetBlue crisis. The New York Times,p.A11.

66Baar, A., & McMains, A. (2007, February 26). How to save a brand built on beingfolksy: JetBlue considers letting stranded passengers have their say in ads.AdWeek,p. 8.

67Nestel, M. (2007, February 16). Winter mess storm of criticism; JetBlue on thin ice with

air travelers. Newsday,p. A3.68Bailey, J. (2007, February 17). Long delays hurt image of JetBlue. The New York Times,p. C1.

69Ibid.

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71White, S. (personal interview, November 29, 2007).

73Harrington, J. (2007, February 27). Five big stories of the week. The St. PetersburgTimes, p. 4D.

08 jetblue

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